Economics of Mining

Mining is the extraction of valuable minerals or geological material from the earth. Mining is time-consuming, expensive and labor intensive. Depending of the development costs, the capital,  operating costs and likely returns, with consideration of environmental, climatic, and social interruptions.  Mining is very costly.

Diamond drilling costs $12-40 per foot ($35-$120/meter).  These are the basic drilling costs. There may be additional costs are for the mobilization and demobilization of the equipment, camp construction and supply, support vehicles, communications, site preparation and drill moves, and supervision. Depending on the contract terms, property location, time of year, etc. the additional costs might double the cost per metre.

Mining is a multi billion dollar global industry with worldwide participation. Commodities can and have been discovered on all continents since the beginning of time. As demographics and demand for commodities have changed, so have the dynamics of which countries participate and benefit from commodity exploration and production.

Mining and mineral exploration occurs worldwide.


Mining and mineral exploration risk is very real and is effected by politics, geographic positioning, and more.

Mining is oriented around extracting commodities from the ground. If there was no demand for the commodities, then there would be no mining. Fortunately, there is worldwide demand for the very diverse set of commodities being produced around the world. As the demand for a commodity goes up, or the availability of a commodity reduces, so does the price. Regular supply and demand dynamics dictate the price of commodities. Commodity demand must elevate the price over the cost threshold of producing that commodity—only then is it economically viable to mine the commodity. Some commodities—like gold and copper—have been known and consumed for centuries, others—like rare earth commodities—are just being discovered and their applications researched.
Mined commodities are in demand worldwide.

Commodities are refined and sold through a sophisticated global market.

There are many commodities being mined at varying levels around the world. The value of the commodities fluctuate with the supply and demand. And the demand is according to economic conditions and their consumption into a variety of applications, including cars, electronics, medicine, power generation and more.

A number of large mining companies operate worldwide, even though they have a head office in a particular country. Mining is global and countries participate according to their resources—resources in the ground and above, e.g. political, financial, etc.